NU - Nubank: Stay Long This World-Class Fintech - Results Are Accelerating

2024-06-27 15:50:13 ET

Summary

• NU has returned 41% since we first rated it a 'Strong Buy' earlier this year, but we think there could be more growth on the horizon.
• The company's Q1 report was incredible, with top and bottom-line growth of 69% YoY and 135% YoY, respectively.
• Given NU's success in Mexico, we think there's potential for 40%-60% upside over the next twelve months on the back of improving monetization and geographical expansion.
• We re-iterate our 'Strong Buy' rating.

In February of this year, we published an article on Nubank ( NU ) titled: "Nubank: Bet Big On Latin America With This Fintech Monster".

The core of the article was focused on NU's incredible LTV/CAC ratio, asset light business model, and demographic tailwinds in the region. Add these up, we thought, and the path to profitability and an even more premium valuation appeared clear....

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